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Outsource magazine: thought-leadership and outsourcing strategy | September 20, 2017

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Hanging On The Telephone

Hanging On The Telephone
Outsource Magazine

Let’s face it – no-one likes getting their phone bill and organisations and corporations are no different to the consumer at home in that respect.

It’s one of the highest recurring costs experienced by most organisations, so any alternative to the traditional dial-up network is to be welcomed.

Instead of making calls over the traditional dial-up network, some organisations are looking at using the internet as the carrier for their voice calls as well as their data communications. Voice over IP (VolP) boiled down to its most basic involves making phone calls across the internet.

There are a number of advantages offered by VoIP, not the least of which is cost. Other benefits include the ability to make complex phone functions easily accessible via a PC browser. It also brings location independence, because the phone number is tied to an IP address, not to a wall-socket which ultimately means that call centres no longer need a geographical location.

Of course there are disadvantages as well. To date, IP phone handsets are much more expensive than ordinary ones, but although vendors counter this argument with the claim that the reduced cost of needing only one Ethernet port per desk, which can be shared by phone and PC. There are also savings at the centre because, once a VoIP call has been set up, it no longer needs the central gateway, whereas a circuit-switched call continues to occupy a switchboard line.

It’s an accepted given that the majority of contact with organisations still comes through voice channels, despite the growth of the internet and alternative electronic communications channels. So organisations everywhere – in both the private and public sectors – are spending millions of pounds, dollars and euros on manned contact centres, be it in the UK or offshore.

There is however a nascent market emerging for hosted IP contact centres. Analyst company Frost & Sullivan predicts that in Europe, the Middle East and Africa (EMEA), the sector will show an annual compound growth rate of 26 per cent between 2004, when it was worth €139.6 million, and 2009, when it will be valued at €444.9 million.

“Although the market is still in a formative stage and the technology is novel, the potential is huge,” said Shomik Banerjee, a research analyst at the organisation.

“As much as 7.9 per cent of the existing installed base is likely to use hosted IP contact centre services in EMEA by 2009 and ultimately they are expected to emerge as a complementary service to premise-based contact centres.”

He anticipates that the first companies to go down this route in any numbers are likely to be enterprises, “primarily because outsourcing contact centre infrastructure helps shift the burden of technology risk onto the service providers. But enterprises can also reduce their maintenance and support staff and gain access to newer services at lower cost.”

Nonetheless, to ensure that this promise becomes reality, he warns that providers “need to develop robust business models with attractive pricing bundles as well as build strong distribution channels with adequate expertise to promote and support their various offerings.”

It’s all part of a wider trend towards outsourced enterprise voice services that currently stands at around $76.5 million according to market research firm Datamonitor. The analyst firm reckons that outsourced voice applications represent “a perfect fit” for customer services which are costly and time inefficient for in-house contact centre agents to handle.

It predicts that outsourced voice will be used most widely in financial services, telecoms, technology and government, all of which will account for 58 per cent of total outsourced voice revenues.

One of the pioneers in the UK has been Abbey, the nation’s sixth largest bank, which is well advanced on a project to implement VoIP across 800 of its UK branches. In February, 2003, the decision was made to sign a €125 million contract with BT Group to install and manage a company-wide VoIP solution. In the two years since the initial test, all five of Abbey’s call centres and most of its 800 branches have incrementally come on line with BTs VoIP solution.

BT was asked to roll out converged connectivity across Abbey’s network of 746 branches around the UK. All company voice traffic will be carried over the IP/VPN network. Using BT Transform and BT IP Clear as the network’s backbone, BT created a flexible foundation and added Multi Media VoIP supplied in partnership with Cisco Systems. “Nobody had ever pulled off a programme on this scale in such a short time frame. We were a bank in a hurry and BT responded to that. We knew they could rise to the occasion,” explains Bill Gibbons, Abbey’s former director of technology services and support.

Written by Stuart Lauchlan. Originally published in Outsource Issue 5, Summer 2005 p34

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